Quick answer

Employers are assigned a payroll deposit schedule — monthly or semiweekly — based on their total federal payroll tax liability during the IRS lookback period. Monthly depositors generally deposit by the 15th of the month following wages; semiweekly depositors follow specific day-of-week deadlines (Wednesday–Friday deposits due the following Friday; Saturday–Tuesday deposits due the following Wednesday). The IRS explains these rules in Employer’s Tax Guide (Publication 15) and other guidance (IRS.gov).

How the IRS decides monthly vs. semiweekly (the lookback period)

  • The IRS uses a lookback period to set your deposit schedule for the coming calendar year. That lookback period is the 12-month period that ended on June 30 of the prior year. Calculate the total federal payroll tax liability (income tax withheld plus both employer and employee shares of Social Security and Medicare) reported during that lookback period.
  • If your total liability in the lookback period was $50,000 or less, you are a monthly depositor for the next calendar year.
  • If it was more than $50,000, you are a semiweekly depositor for the next calendar year.
    (See IRS guidance: Understanding Your Payroll Tax Obligations.)

Note: The IRS notifies employers of their deposit schedule. You should still verify your classification; it’s your responsibility to deposit on time.

Depositing rules — exactly when payments are due

  • Monthly depositors: Deposit all employment taxes for a calendar month by the 15th day of the following month. Example: Taxes withheld in April are due by May 15.

  • Semiweekly depositors: The due date depends on the day wages are paid.

  • If wages are paid on Wednesday, Thursday, or Friday, deposit by the following Friday.

  • If wages are paid on Saturday, Sunday, Monday, or Tuesday, deposit by the following Wednesday.

  • $100,000 next-day rule: If an employer accumulates $100,000 or more of federal employment tax on any day during a deposit period, deposits become due by the next banking day. This is an emergency rule that can change your immediate deposit timing; it does not change your declared schedule for the calendar year. (IRS.gov)

Who this affects — common scenarios

  • Small retail or service businesses with lower payroll and withholdings commonly meet the monthly threshold and deposit once a month.
  • Businesses with larger or weekly payrolls (manufacturing, construction, large hospitality firms) often exceed the $50,000 lookback threshold and are semiweekly depositors.
  • Startups and seasonal businesses should track their lookback liabilities carefully since rapid growth or seasonal spikes can change classification year to year.

In my work advising small businesses, I’ve seen a seasonal restaurant unexpectedly become a semiweekly depositor after a busy summer pushed its lookback total past $50,000. They needed to adjust cash flow and payroll processes quickly to avoid missed deposits.

Special filing groups and exceptions

  • Form 944 filers: Some very small employers receive IRS approval to file Form 944 (Employer’s Annual Federal Tax Return) instead of quarterly Form 941. The IRS notifies eligible employers about Form 944 filing and deposit expectations. Confirm your deposit timing if you receive a Form 944 notice.
  • Federal electronic deposit requirement: The IRS requires most employers to make deposits electronically through the Electronic Federal Tax Payment System (EFTPS) or through an IRS-authorized electronic payment option. Check current EFTPS rules on IRS.gov and enroll early; enrollment can take a few business days. (IRS.gov)

Penalties and interest for late or missed deposits

Late deposits trigger penalties and interest. Penalties increase the longer a payment is late, and interest accrues on unpaid tax. The IRS publishes the failure-to-deposit rules and penalty frameworks; even one missed semiweekly deposit can cause penalties that exceed the tax due.

If you receive a penalty and have a reasonable cause (e.g., natural disaster, bank error), you can ask for abatement and should document the facts. For first-time or isolated mistakes, the IRS may consider penalty relief under certain conditions — see the IRS penalty relief guidance and consider working with a tax professional. (IRS.gov)

Practical steps to determine and comply with your schedule

  1. Calculate lookback totals now: Add the federal payroll taxes (withheld income tax + Social Security + Medicare amounts) from the lookback period (the 12 months ending June 30 of last year). If the total is over $50,000, prepare for semiweekly deposits.
  2. Confirm IRS notices: The IRS will mail or notify your business of your assigned deposit schedule. Treat this as a confirmation but verify independently.
  3. Enroll in EFTPS: Enroll and test early so electronic payments post on time. EFTPS is the most common method for federal tax deposits.
  4. Automate with payroll software or service: Payroll providers handle deposit timing and remittances; verify configuration (lookback thresholds and pay frequency) so automated payments match IRS rules.
  5. Create a cash‑flow buffer: Semiweekly depositors need more frequent cash on hand. Maintain a short-term reserve for payroll tax deposits.
  6. Monitor changes: Recalculate each year after June 30 for the next calendar year. Watch for unusual spikes that trigger the $100,000 next-day rule.
  7. Reconcile and document: Match payroll reports (Form 941/944) to deposits each quarter/year. Documentation supports requests for penalty relief if needed.

Examples (real-world, simplified)

  • Semiweekly example: A construction firm pays workers weekly on Friday. Because the lookback total exceeded $50,000, the firm is a semiweekly depositor. A paycheck including wages paid on Wednesday must have associated taxes deposited by the following Friday.

  • Monthly example: A small bookstore has low withholdings and, in the lookback period, reported $30,000 in total payroll taxes. It is a monthly depositor and deposits April taxes by May 15.

  • $100,000 rule: A rapidly growing startup with inconsistent payments accumulates $100,000 in federal employment taxes on a Friday. Under the emergency rule, the deposit is due by the next banking day (generally the following Monday), regardless of the scheduled monthly/semiweekly status.

Common mistakes and how to avoid them

  • Relying only on a payroll vendor without confirming deposit schedule settings. Action: Audit vendor remittance reports quarterly.
  • Forgetting the lookback period timing — some employers compare the current year instead of the IRS lookback. Action: Use the June 30 cutoff to calculate lookback totals.
  • Not enrolling in EFTPS early enough. Action: Sign up well before your first deposit due date.

When to get professional help

If you receive an IRS deposit-schedule notice you don’t understand, get a penalty, or face a sudden spike that triggers the $100,000 rule, consult a CPA or payroll tax specialist. In practice, early intervention often limits penalties and interest and prevents collection actions like Trust Fund Recovery Penalties for willful failure to deposit employee taxes.

Further reading and resources

Related FinHelp guides

Professional disclaimer
This article explains federal payroll deposit schedules for educational purposes and does not replace personalized tax advice. Verify current rules on IRS.gov or consult a licensed tax professional for decisions specific to your business.